Can NextEra Energy Grow Through Transmission & Distribution Expansion?

NextEra Energy NEE stands at the forefront of the U.S. clean energy transition, with its vast network of transmission and distribution (“T&D”) lines serving as a critical pillar of the long-term growth strategy. As the nation’s largest producer of renewable energy from wind and solar, the company’s ability to move this clean power efficiently and reliably to end-users is central to its competitive advantage.

NextEra’s T&D infrastructure, primarily through its regulated utility subsidiary Florida Power & Light (“FPL”), spans thousands of miles, ensuring grid stability while accommodating the rising penetration of renewable generation. The company plans to invest $21.68 billion in 2025-2029 period to further expand T&D lines.

FPL operates nearly 91,000 circuit miles of transmission and distribution lines and 921 substations to provide efficient services to its customers. The continued upgrades to these lines, fortifying them against extreme weather to deploying smart-grid technologies and increasing capacity, assist the company to cater rising electricity demand, driven by Florida’s population growth and the expansion of energy-intensive industries such as data centers.

The build-out of high-voltage transmission lines also supports its subsidiary, NextEra Energy Resources, by enabling renewable projects in resource-rich regions to deliver power to high-demand markets. This creates a dual revenue stream from both regulated and competitive operations, enhancing earnings stability.

With federal and state policies incentivizing grid upgrades and renewable integration, NextEra’s T&D investments are expected to generate predictable returns under regulated rate structures. This infrastructure not only safeguards reliability but also cements NextEra’s role as a backbone of America’s clean energy economy, fueling consistent, long-term shareholder value creation.

Transmission & Distribution Lines Support Utility Growth

Robust transmission and distribution networks enable utilities to deliver power reliably, integrate renewables efficiently and support demand growth. These assets generate stable, regulated returns while positioning utilities to capitalize on electrification and infrastructure modernization trends.

Utilities like Duke Energy DUK and Dominion Energy D benefit significantly from expansive transmission and distribution networks. Both Duke Energy and Dominion could ensure reliable electricity delivery, enable integration of renewable generation and support rising demand through these networks. Investments in grid modernization and capacity expansion provide stable, regulated returns while strengthening their competitive positioning in an increasingly electrified economy.

NEE’s Price Performance

NextEra’s shares have gained 3.2% in the past three months compared with the Zacks Utility Electric-Power industry’s rise of 2.3%.

NEE Stock Returns Better Than Its Industry

NextEra’s trailing 12-month return on equity (“ROE”) is 12.31%, ahead of the industry average of 10.41%. ROE is a financial ratio that measures how well a company uses its shareholders’ equity to generate profits. The current ROE of the company indicates that it is using shareholders’ funds more efficiently than peers.

NextEra’s Earnings Estimates Moving North

NextEra expects its 2025 earnings per share to be in the range of $3.45-$3.70 compared with $3.43 a year ago. The Zacks Consensus Estimate for NEE’s 2025 and 2026 earnings per share indicates year-over-year growth of 7.3% and 7.9%, respectively. NEE expects to increase its earnings per share in the range of 6-8% annually through 2027 from the level of 2024.

NEE’s Zacks Rank

NextEra currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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This article originally published on Zacks Investment Research (zacks.com).

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